Price Discrimination

First Degree Price Discrimination

each unit is sold as max possible cost (leads to no CS all PS)

Second Degree Price Discrimination

dif pices for dif quanitities

Third Degree Price Discrimination

price is determined by different characteristics (groups)
- elastic = lower price

- inelastic = higher price

Intertemporal Price Discrimination

using time to determine price (e.g. electronics changing price over time)

Peak Load Pricing

higher price during peak demand (historic pricing thats predictable)

Two Part-Tarrifs

require that consumers pay an entry fee to the right to buy product

Tying

sells one product that requires a secondary product

in a two part-tarrif, what should the enterence fee be?

comsumer surplus

in a two part-tarrif, what should the per-unit price be?

price equal to the marginal cost